The Chinese furniture manufacturer that made headlines in 2022 for purchasing its own container ship to combat pandemic shipping delays has now sold the vessel. Loctek Ergonomic, known for producing sit-stand desks and office furniture, commissioned the ship for $32.6 million to address severe supply chain disruptions at the time. However, the company has now sold the vessel to Greek shipping firm Minerva Marine for $31 million.
Photo: Dreamstime.
Loctek initially justified the purchase as a strategic move to support a surge in online sales and boost its U.S. market operations. The decision was made when container shipping rates were extraordinarily high, averaging $9,378 per 40-foot container, according to industry tracker Drewry. At the time, many supply chain experts expressed doubts about Loctek's plan, warning that the company might not fully understand the complexities and risks associated with ship ownership. Analysts also predicted that freight rates would inevitably normalise, potentially rendering the investment unnecessary.
By the time the ship was completed in March 2023, spot rates had dropped significantly to around $3,529, mirroring a broader stabilisation in global shipping costs. It remains unclear whether Loctek ever used the ship to transport its own furniture. Reports suggest the vessel was chartered out for six months in 2023 to French shipping giant CMA CGM at a daily rate of $16,000, providing the company with an alternative means to recoup its costs.
The move highlights the unpredictability of the global shipping industry and the pressures manufacturers faced during the pandemic when securing reliable transport was critical. Loctek's bold strategy to invest directly in a vessel may have been ambitious, but it ultimately appears to have been a short-term solution rather than a long-term asset.
This sale also underscores how quickly the global supply chain landscape has shifted in the aftermath of the pandemic. Companies that once scrambled for control over their logistics now find themselves reassessing those decisions in a vastly different economic climate. For Loctek, while the ship may not have delivered the intended benefits, its eventual sale represents a recalibration in light of stabilising market conditions.
Loctek's experience serves as a notable example of the challenges manufacturers faced when trying to adapt to unprecedented disruptions. The decision to purchase and later sell the vessel reflects both the extraordinary pressures of the pandemic and the volatile nature of global trade. As the shipping industry continues to evolve, manufacturers and logistics providers alike will likely seek more flexible and sustainable solutions to future supply chain challenges.
Source: www.furnituretoday.com